While it may not feel natural to think so far in advance, it’s important to give the future some thought. Knowing which life insurance plan to take out in later life can feel like an overwhelming task but it’s important for the greater good of your loved ones. You might find it beneficial to break down your options into pros and cons before making your decision.

Here’s what you need to know.

What is life insurance?

Life insurance exists to support your loved ones in the event of your death. The idea is that you pay monthly premiums and eventually receive a lump sum or regular payments when you eventually pass away. The policy you buy (and the amount you pay in line with this) will dictate the eventual payout.

You have the option to leave it as an inheritance or to cover mortgage or rent payments. This flexibility means it can give people added peace of mind knowing their loved ones will be more financially secure after they’re gone.

There are various iterations of life insurance.

What is term life insurance?

Term life insurance is life insurance that covers you based on a fixed rate of payments for a set period. This set period is known as the ‘relevant term’. Essentially, the payout will be received if you die in a set timeframe.

It tends to be a good option for younger families with considerable financial needs that need to be covered if the person bringing in most of the income passes away. People will take out term insurance for a period that suits them, whether that’s one year or 50 years.

Over 50 life insurance

Another option is over 50 life insurance, which as the name suggests, is only eligible to those aged 50 or above. Over 50 life insurance plans tend to offer acceptance without requiring medical checks, which is a big pull factor for many, as typical life insurance providers may be less willing to give policies to those over a certain age. Many policies will reject new applicants based on preexisting medical conditions, which are more common with older age.

Assuming you meet the criteria and make timely payments, you will be guaranteed a fixed payout when you die – this amount will be determined by the policy you take out. The premiums you pay will also be fixed, so it’s worth using an online budget tool when determining your payments.

Whole of life insurance

Whole of life insurance is a life insurance policy that covers an individual’s entire lifetime, assuming that premiums have been paid until the maturity date. With this type of insurance, you’re guaranteed to be paid no matter when you die.

Which is best for later life?

This decision is based entirely on your personal circumstances, such as whether you have health conditions. If you have a preexisting medical condition, over 50 life insurance could be the best option to guarantee a payout for your loved ones.